International Mkt exam 1

Ch. 1

Ch. 1

D

Which of the following is a focus of the new concept of marketing?
A) Making a profit is the only end result of selling products.
B) emphasizing the product rather than the end consumer
C) achieving objectives by pushing products toward consumers
D) using integrated marketing mix to achieve profits

B

Which of the following is a marketing mix element?
A) profit
B) promotion
C) potential
D) package

A

Which of the following statements is true about the strategic concept of marketing?
A) Its objective is to maximize stakeholder benefits.
B) It has a product-centric marketing focus.
C) It emphasizes marketing from a company-centric paradigm.
D) Its focus is only on consumers and not their societies.

A

Which of the following statements is true about global marketing?
A) Marketing practices must vary between different market segments.
B) Customers and markets across regions are considered similar.
C) Transferring irrelevant experience between markets may be beneficial.
D) Marketing initiatives cannot include more than one marketing mix element.

C

Which of the following statements best describes the phrase “global localization” in a nutshell?
A) A global product must be the same product everywhere without modifications in the marketing mix.
B) A global marketer must push local markets to accept global products.
C) A global marketer must adapt product marketing mix to the similarities and differences in the world market.
D) A global product must be a different product everywhere across the world regions.

B

A company that sees only the similarities between the domestic and the world market is said to have a(n) ________ orientation.
A) regiocentric
B) ethnocentric
C) concentric
D) polycentric

D

Levy Inc., a U.S.-based smartphone manufacturer, extends its line of high-end smartphones to the Asian market to capitalize on the high demands for smartphones. Owing to its huge success in the United States, Levy uses the same set of marketing mix in the Asian markets. In this case, the company’s management orientation is referred to as ________.
A) regiocentric
B) polycentric
C) concentric
D) ethnocentric

Which of the following management orientations views only the differences in the world regions?
A) ethnocentric
B) regiocentric
C) polycentric
D) concentric

B

Which of the following statements is true of a polycentric company?
A) Its orientation is based on a belief in home-country superiority.
B) Its marketing management is decentralized.
C) It’s generally referred to as a domestic company.
D) It views foreign operations as being secondary to domestic operations.

Which of the following management orientations provides a worldview and sees the similarities and differences in home and host countries?
A) ethnocentric
B) polycentric
C) concentric
D) geocentric

C

Latour Boutiques, which is based in Europe, views each section within the European Union as a unique market and develops an integrated marketing strategy to sell its products. Due to its success in the European territory, Latour exports its products to other world markets sans any modifications. In this case, Latour’s management orientation is typically ________.
A) concentric
B) polycentric
C) regiocentric
D) geocentric

A

Which of the following companies is centralized in its market management strategies?
A) ethnocentric
B) polycentric
C) regiocentric
D) geocentric

D

Which of the following companies typically has a polycentric management orientation?
A) transnational
B) international
C) domestic
D) multinational

A

Which of the following orientations is based only on home-country superiority?
A) ethnocentric
B) polycentric
C) geocentric
D) regiocentric

B

Which of the following is a driving force for global integration?
A) domestic focus
B) market needs
C) market differences
D) national controls

D

Which of the following is a restraining force behind global integration?
A) market needs
B) management vision
C) strategic intent
D) national controls

Government regulations on advertising and promotion are similar across all world countries.

False

A domestic company will have many times the revenue of a global company as it focuses only on local regions.

False

The time and cost barriers associated with distance have increased over the past decade.

True

A global company can leverage its experiences in any market in the world.

False

Trade agreements such as the European Union and NAFTA have decreased the pace of global integration.

False

Multinational companies adhere to the notion that the products that succeed in the home country are superior and, therefore, can be sold everywhere without adaptation.

True

Management vision is a driving force for global integration.

True

Cost is a restraining force affecting globalization.

True

Most global markets do not exist in nature; they are created by marketing effort.

False

Geocentric companies are based on a belief of home-country superiority.

True

A regiocentric manager views the world outside his area of interest with an ethnocentric orientation.

True

Geocentric companies are integrated on a global scale.

True

A polycentric orientation is diametrically different from an ethnocentric orientation.

False

A polycentric company views foreign operations as being secondary or subordinate to domestic operations.

False

Ethnocentric companies cater to the different needs of different world regions.

False

Ethnocentric companies are sometimes referred to as global companies.

True

Global companies view world regions as unique and seek to develop an integrated regional strategy.

False

Market capitalization is defined as a company’s total revenues in a given accounting period.

False

A company engaging in global marketing must standardize all elements of the marketing mix

False

A company’s competitive advantage exists only in its price differentiation strategies.

True

Global marketing requires marketers to behave in a way that is global and local at the same time by responding to similarities and differences in world markets.

False

The old marketing concept focused on a customer-centric marketing approach.

False

Marketers can always directly apply experience from one country to another or from one market to another.

True

The strategic concept of marketing focuses on customer satisfaction in a socially responsible and sustainable way.

False

Marketing discipline varies from one region to another.

True

One difference between domestic marketing and global marketing is the scope of activities.

Case 1-1: Alpaca Luxe

Case 1-1: Alpaca Luxe

alpaca shawls

What is the main product sold by Alpaca Luxe?

Virginia
North Carolina

From where is the alpaca fiber used to manufacture the company’s products sourced? Where are the products manufactured?

the economy downturn

What environmental and firm-specific drivers are coaxing Alpaca Luxe to explore international markets?

International trafe representatives at the department of commerce

Where did Alpaca Luxe owners and managers go to get information on international marketing opportunities?

interested in unique designs
The mkt for luxury brands is thriving

What factors prompted Alpaca Luxe to consider Mongolia for international expansion?

Helsinki
Amsterdam
Munich

What other locations besides Mongolia were the owners considering for sales expansion? What are some of the pros and cons of each location?

1-2: Zhang National Steel

1-2: Zhang National Steel

foreign investors are buying these mills and increasing output and efficiency

What does it mean that many of China’s old steel mills are being “privatized’?

surplus

They are imposing 5-10% duties on exports

Is the domestic Chinese steel market experiencing a steel surplus or deficit? What are some of the actions the Chinese government has taken in response to its domestic steel situation?

the chinese are not building as rapidley as they have the past several years. Zhang is a domestic company and worried that they wont be needed

What are the business-environment and firm-specific drivers that are likely to lead to the internationalization of the Zhang Company?

the US and EU are considering imposing heavy import tariffs, why India is rapidly increasing their steel consumption

Compare and contrast the U.S., European, and Indian markets for steel. Which market do you think is the most attractive and why?

Ch. 2

Ch. 2

C

Which of the following statements is true about world economy?
A) Countries in emerging markets have sustained low rates of growth.
B) Global competitors are deprived of new opportunities.
C) The emergence of global markets has displaced local ones.
D) The integration between all world regions has steadily decreased.

B

Which of the following statements is true about the trends in world economy?
A) Global economic activity will shift from the East to the West.
B) The demand for natural resources will continue to grow.
C) Shifts in consumer segments will not affect the consumer marketplace.
D) An aging worldwide population will demand decreasing levels of productivity.

A

Which of the following is characteristic of a pure market allocation system?
A) The consumers decide what goods will be produced and by whom.
B) The state determines the goods that consumers should use.
C) It has limited economic integration with the rest of the world regions.
D) It fails to utilize the market mix elements when demand exceeds supply.

C

Which of the following is characteristic of a command allocation system?
A) The government’s role is to ensure the protection of consumer rights.
B) Product distribution is handled by a large number of intermediaries.
C) The state makes decisions on what consumers should purchase.
D) Consumers allocate resources to the system.

A

Which of the following is used to indicate the relative wealth of a country’s citizenry?
A) Gross National Product
B) Gross Output
C) Gross Domestic Product
D) Gross Value Added

B

With regard to Gross National Product per capita, which of the following categories of countries is considered to be developed?
A) lower-middle income
B) high-income
C) low-income
D) upper-middle income

D

Which of the following is characteristic of low-income countries?
A) sustained economic growth
B) low engagement in agriculture
C) high degree of urbanization
D) heavy reliance on foreign

D

Which of the following categories of countries is referred to as a postindustrial country?
A) low-income
B) upper-middle income
C) lower-middle income
D) high-income

C

Which of the following is the most valuable economic variable used to chart strategic plans for global market expansion of commercial products?
A) regulations
B) competitors
C) income
D) location

B

________ accounts for the largest share of output in less developed countries.
A) Education
B) Agriculture
C) Consumer goods
D) Heavy industries

A

________ provides the best comparison of the standards of living in the countries of the world.
A) Purchasing power parity
B) Exchange rate
C) Gross National Product per capita
D) Gross National Income

A

Which of the following is the primary output of the World Bank’s International Comparison Program?
A) purchasing power parities
B) currency fluctuations
C) market demand and supply
D) production costs

C

Which of the following can be perceived from measuring actual individual consumption across global markets?
A) Developed countries are likely to benefit more from full integration than developing countries.
B) Purchasing power differences do not account for differences in demand of products and services.
C) The living standards of high-income countries differ from low-income countries.
D) A vast majority of the world’s income is concentrated in the lower-middle or upper-middle income countries.

B

Which of the following is the most important variable considered for identifying opportunities in the global economy to sell low-priced products?
A) middle-class income
B) location of population
C) demand in products
D) cost of products

A

Which of the following portrays all the economic transactions of a country with the rest of the world?
A) balance of payments
B) International Comparison Program
C) purchasing power parity
D) Gross National Product per capita

D

Which of the following is an example of a customs union?
A) CSME
B) European Economic Area
C) NAFTA
D) Mercosur

C

Which of the following statements is true of global trade patterns?
A) The annual rate of output is less than the total merchandise trade.
B) In most countries, the share of trade as a percentage of the national economy has reduced.
C) Import and export growth has outpaced the rate of increase in GNP.
D) The share of agriculture in exports has increased over the past decade.

B

________ refers to the price of one currency in terms of another.
A) Tariff
B) Exchange rate
C) Duty
D) National income

A

Which of the following is a characteristic of countries in a free trade area?
A) abolition of internal tariffs and quotas
B) establishment of common external barriers
C) removal of restriction on factor movements
D) harmonization of economic, social, and regulatory policies

D

Which of the following eliminates trade barriers to allow the harmonization of economic, social, and regulatory policies?
A) a customs union
B) a common market
C) a free trade area
D) an economic union

A

Which of the following is a trade block created between Canada, Mexico, and the United States?
A) NAFTA
B) SCCM
C) CIS
D) APEC

True

The macro dimensions of the environment are economic, social and cultural, political and legal, and technological.

False

Economic growth remains concentrated at the high-income countries.

False

The more developed a country is, the scarcer the availability of economic data.

True

Technology as a factor has contributed to the flattening of the world economy.

False

Countries in emerging markets have sustained high rates of growth by taking advantage of high labor costs.

True

Global companies entering new markets will need to adapt their offerings, distribution systems, and operations to local demand and custom.

True

Most countries of the world have a mixed system of allocation.

True

There are no pure market or command allocation systems today.

False

According to the Heritage Foundation, the country with the highest degree of economic freedom is the United States.

False

Low-income countries are typically referred to as industrialized nations.

Another name for lower-middle income countries is industrializing countries.

True

The nations of the G20 are among the most powerful nations of the postindustrial societies.

True

A market can be defined as a group of people willing and able to buy a particular product or service.

False

Location is the single most valuable economic indicator of potential for industrial products.

False

Agricultural output and services, in particular, are often priced higher in relation to industrial output in developing countries than in industrial countries.

True

Purchasing power differences can account for differential in demand of products and services, and also provide an indication on differences in costs.

False

Purchasing power parity measures an economy’s output in terms of demand and supply.

False

The current account is a record of all long-term direct investment, portfolio investment, and other short- and long-term capital flows.

False

In general, a country accumulates reserves when the net of its current and capital account transactions shows a deficit.

True

Devaluation means that more of the home-country’s currency is now needed to buy the same amount of a foreign currency.

False

In a fixed exchange-rate system, the currency value is determined by demand and supply.

False

The United States is an example of a country that follows a fixed exchange-rate system.

False

The members of a customs union agree to the establishment of individual external trade barriers.

True

The Euro is a common currency adopted by the members of the European Union.

True

The member states of the Commonwealth of Independent States (CIS) have signed agreements addressing issues of integration and cooperation with respect to economics, defense, and foreign policy.

True

A common market goes beyond the removal of internal barriers to trade and the establishment of common external barriers to the important next stage of eliminating the barriers to the flow of factors (labor and capital) within the market.

True

Member states of the North American Free Trade Agreement (NAFTA) are allowed to make separate bilateral treaties with nonmember states.

True

The ASEAN Free Trade Area, or AFTA, was created in 1992 with the aim of promoting the region’s competitive advantage as a single production area with the elimination of tariff and nontariff barriers among the member countries.

2-1: Munich Re

2-1: Munich Re

Insurance
catastrophices

What is reinsurance?
What are some of the different types of risk insured by Munich Re?

Germany

What country passed the Terrorism Insurance Act and when was it passed?

…

Why did Munich Re refuse at first to provide terrorism insurance to companies?

…

What percent of large and medium-sized businesses in the U.S. have terrorism insurance?

…

Explain the EU environmental liability directive passed in 2007.

2-2: Doing Business in Cuba

2-2: Doing Business in Cuba

he has installed a fledgling real estate market, people can buy and sell cars and homes. Also established social security

Explain how Cuba’s economy has changed since 2012 under the leadership of Raul Castro, brother of ailing leader Fidel Castro.

Using outside sources, explain the United States’ recent move to normalize trade relations with Cuba. What activities have been liberalized?

Yes, if Cuba keeps changing the way they operate, people will have mpre control over what they can buy

Do you think the Florida-based business Deco 1, described in the case, could be successful in Cuba? Why or why not?

Ch. 3

Ch. 3

C

Which of the following statements is true about the political risks in a global marketing environment?
A) The political risk of low-income countries is lesser than high-income countries.
B) The more a country is developed, the greater is the political risk.
C) Political risk is a major deterrent for companies that want to invest abroad.
D) A country with high political risks attracts more investors.

D

Which of the following is an approach that foreign companies in the United States use for avoiding taxes on their revenues?
A) confiscation
B) liquidation
C) expropriation
D) earnings stripping

________ occurs if ownership of a property or assets of a company is transferred to the host government.
A) Internalization
B) Nationalization
C) Deportation
D) Deracination

C

When a nation refuses to accept the judgment against it made by the International Court of Justice, the plaintiff nation can seek recourse through the ________.
A) International Law Commission
B) Permanent Court of International Justice
C) United Nations Security Council
D) World Bank Investment Dispute Settlement Center

C

Which of the following statements is true about code law?
A) In code-law countries, intellectual property rights are established by prior use.
B) It is established based on the rulings from previous cases.
C) It uses written norms, which are complemented by court decisions.
D) In code-law countries, companies are granted the ability to operate by public authority.

A

The national laws applying to a transaction crossing boundaries must be determined by ________.
A) both parties involved in the agreement
B) only the host-country government
C) only parent-country government
D) the International Law Commission

A

Which of the following statements is true about patent and trademark protection in the global marketing environment?
A) Patents and trademarks protected in one country are not necessarily protected in another.
B) Foreign organizations can register patents and trademarks only in their parent country.
C) Patent and trademark laws are the same across all nations.
D) Trademarks and patents cannot be counterfeited.

C

________ refers to the unauthorized copying or production of a product.
A) Accommodation
B) Embezzlement
C) Counterfeiting
D) Expropriation

B

In many parts of the world, sales of unauthorized videos of Hollywood movies cost the movie studios billions of dollars. When illegal copies of movies are made, what form of intellectual property has been wrongly appropriated?
A) patent
B) copyright
C) trademark
D) trade secrets

A

Which of the following business practices does the Sherman Act of 1890 prohibit?
A) limiting production
B) betting
C) licensing trademarks
D) direct investments

B

How can a licensor prevent a licensee from using the licensed technology to compete with it directly?
A) by allowing the licensee to continue using the technology after the contract has expired
B) by limiting the licensee to selling only in the home country
C) by keeping the licensed technology unchanged
D) by cancelling the contractual agreement

Which of the following is an example of grand corruption?
A) isolated transactions executed by individual public officials that abuse their office
B) favors granted in exchange for personal consideration to a public official
C) collusion between members of the private sector and public officials for mutual benefit
D) state officials misusing large amounts of public resources over a prolonged period

Which of the following is an economic attribute shared by countries with a high perceived level of corruption?
A) high levels of poverty
B) high economic growth rate
C) free trade policies
D) low import tariffs

B

Americans doing business abroad must conform to proper ethical and legal behavior as spelled out by the ________.
A) TRIPs
B) FCPA
C) FERA
D) ICJ

B

Which of the following has been empowered to resolve conflicts between national law and EU law?
A) the European Court of Auditors
B) the European Court of Justice
C) the International Chamber of Commerce
D) the International Criminal Court

A

Which of the following replaced the General Agreement on Tariffs and Trade?
A) the World Trade Organization
B) the European Union
C) the North American Free Trade Agreement
D) the World Intellectual Property Organization

TRUE

Political risk tends to be higher in developing countries compared to industrialized countries.

TRUE

Many companies make efforts to minimize their tax liability by shifting the location of income.

FALSE

Creeping expropriation is said to have occurred when a previously expropriated property by the government is returned to the original owners.

FALSE

Expropriation is said to have occurred when a foreign national company dispossesses a home-country company through uncompetitive practices.

FALSE

If a foreign company is taken over by the host-country government and some form of compensation is paid, confiscation is said to have occurred.

TRUE

A government can limit the economic activities of a foreign firm that resists its effort to introduce home-country nationals into the company.

FALSE

Foreign properties expropriated by a government cannot be reclaimed.

TRUE

Private International Law is the body of law that applies to interpretations of and disputes arising from commercial transactions between companies of different nations.

FALSE

Most countries that were once part of the British Empire now have civil law systems.

TRUE

Common law cases are decided by precedents set in past judicial decisions.

TRUE

If a foreign company can be shown to be doing business in the United States, then it is subject to the jurisdiction of U.S. courts.

TRUE

Typically, all economic activity within a nation is governed by that nation’s laws.

FALSE

In the United States, a patent holder retains all rights for the life of the patent only if the product is produced or sold.

TRUE

An associative counterfeit uses a product name that differs slightly from a well-known brand but is close enough that consumers will associate it with the genuine product.

TRUE

Brand value is one of the most important assets that a business holds.

FALSE

Antitrust laws are designed to restrict new competition from entering foreign markets.

TRUE

U.S. companies are subject to U.S. antitrust laws no matter what country they are doing business in.

TRUE

Each act of privatization dilutes the command portion of a mixed economic system.

TRUE

In the United States, laws do not regulate the licensing process per se as do technology transfer laws in the EU, Australia, Japan, and many developing countries.

FALSE

Licensing agreements do not come under antitrust scrutiny.

TRUE

A company hoping to protect its trade secrets from being stolen by a foreign company can seek relief under the Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement.

FALSE

U.S. individuals are exempted from being prosecuted for bribery under the Foreign Corrupt Practices Act

TRUE

A common economic characteristic of countries with pervasive corruption is a lack of integration with the global economy.

FALSE

A U.S. company is exempt from the Foreign Corrupt Practices Act if a host-country citizen serving as an agent for the company pays a bribe to a government official in the host country.

TRUE

The fact that the United States has more lawyers per 100,000 people than other countries is, in part, a reflection of the low-context nature of American culture.

FALSE

Generally, companies find that the fastest, easiest, and least expensive way to resolve international commercial disputes is litigation.

FALSE

By law, U.S. courts can be discretionary while accepting an arbitrator’s decision in patent disputes.

FALSE

GATT is primarily based on the principle of trade protectionism.

3.1 Case

3.1 Case

the shipment of goods or containers to an intermediate destination, then to yet another destination.

What is a “transshipment?”

Toys that were Subject to standards in the US
China

What did the transshipped container received in Norfolk, Virginia contain and what was the country of origin of the products?

Attempting to bypass standards of the US of the size of parts and voltage of batteries

What types of trade barriers are transshipped products attempting to bypass?

70%-80%

What percentage of toys sold in the United States come from China?

Garlic lost over 13 million cans
$80 million in 5 years

What transshipped Chinese product has the European Union (EU) had particular trouble with in recent years? How many tariff dollars were lost by the EU over a five year period due to this transshipped product?

Dubi

In order to avoid the U.S. trade embargo with Iran, what country do U.S. companies often ship through?